What 'Unprecedented' US Tariffs Mean For Europe

US President Donald Trump's April 2 announcement to raise tariffs to the highest level in more than 100 years has sent stock markets tumbling and shaken the global economy.

"This is unprecedented in the last century in terms of the scale of tariffs, the number of countries hit, [and] just the sheer level of these tariffs," Emily Kilcrease, a senior fellow at the Center for a New American Security (CNAS), told RFE/RL.

"I think we're going to see shocks that you can't fully anticipate because we've never seen this sort of high level of tariffs in the era of globalization," she said.

That worldwide fallout could hit the European Union particularly hard, economists who spoke to RFE/RL said.

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What Do US Tariffs Mean For You?

The direct impact of Trump's 20 percent levy on EU products has sparked fears of coming inflation and about the economic outlook for the 27-country bloc's embattled manufacturers, who are already reeling from US levies on cars and steel. Experts say other major sectors, such as Europe's pharmaceutical industry, which exports heavily to the US market, could also be hard-hit.

"These pharmaceutical firms will try to sell into the US as much as they can," Reid I'Anson, a senior economist at the trade intelligence firm Kpler, told RFE/RL. "They may drop their prices a little bit to try and stay competitive, but it is very likely that outright demand in the US for European goods will decline. That will flow through to a weaker economic environment in Europe."

How Hard Will Trump's Tariffs Hit Europe?

Tariffs are essentially a tax paid by an importer that are usually passed on to distributors, wholesalers, retailers, and ultimately, to consumers.

About 60 countries that run the largest trade surpluses with the United States -- including key allies such as the EU, Japan, and South Korea -- now face extra tariffs higher than the flat 10 percent levy announcement, with dozens of others facing tariffs that could extend to 50 percent or more in total.

During his announcement in the White House's Rose Garden, Trump said the basic 10 percent tariff on almost all countries takes effect on April 5, while the higher so-called reciprocal tariff rates would apply starting April 9.

While economists say the tariff regime announced by Trump is set to make levied goods in the country more expensive, it will also affect industries in Europe and elsewhere that rely on exporting to the US market.

"European exporters selling things to the United States are going to have to pay a higher cost, which is passed on to American consumers, but it's going to affect their ability to sell things [and] they're going to lose market share," Matthew Goodman, director of the Greenberg Center for Geoeconomic Studies at the Council on Foreign Relations, told RFE/RL.

Brussels and individual European governments are still deciding how to react and further negotiations could take place, but the prospect of retaliatory tariffs placed on US products is real, with European Commission President Ursula von der Leyen saying the bloc is "now preparing for further countermeasures, to protect our interests and our businesses if negotiations fail."

Goodman says any retaliation from Europe will raise costs for European consumers and would also raise inflation and slow growth in the United States.

"That has big implications for everybody in the world because [the United States is] the largest economy in the world, and if our economy slows, then everybody gets hit," he said.

CNAS's Kilcrease, who is a former deputy assistant US trade representative, says Trump's tariffs could also have knock-on effects for Europe, including higher prices and even job losses for key industries.

"I'd actually be quite worried about jobs impacts and about investment impacts because you just don't have that customer anymore, or it's just going to be much harder with a 20 percent tariff to sell into that market," she said.

How Will The Global Impact Of Trump's Tariffs Affect Europe?

The new US tariffs could also have global fallout, affecting the price of key products that rely on global supply chains and reorienting the flow of international trade in unexpected ways.

The price of an iPhone, for instance, could increase by 30 to 40 percent in the United States, according to projections by the financial firm Rosenblatt Securities.

The cheapest iPhone 16 model is currently listed at $799 but could cost as much as $1,142 if Apple decided to pass the cost on to consumers. A more expensive iPhone 16 Pro Max that currently retails at $1,599 could rise to nearly $2,300. Similar percentage increases are projected for other markets.

"This is going to have ripple effects, and it's going to feed through the many different things that go into an iPhone, from the semiconductors made in Taiwan to the glass that is made in Japan, to the assembly of the iPhone in China," said Goodman. "All these things are going to be hit with tariffs, and so the price is ultimately going to be passed on to consumers, both in Europe and in the United States."

Washington's escalating trade war with Beijing will also come with worldwide repercussions that will hit Europe directly and indirectly.

China announced on April 4 that it will impose additional tariffs of 34 percent on imports from the United States in retaliation for duties of the same amount unveiled by Trump. The "reciprocal" tariff placed on China is on top of a 20 percent levy already imposed by the Trump administration.

Trump also targeted countries through which Chinese companies have been diverting products to the US market, among them Vietnam, which faces a new tariff of 46 percent.

As Kpler's I'Anson explains, the United States accounts for around 25 percent of Chinese exports, but with that market now saddled with tariffs, Chinese exporters will have to cut prices and reorient those products to other markets.

This could in turn lead to a flood of discounted Chinese imports around the world, something Brussels has said it is already tracking and preparing countermeasures to protect its manufacturers from.

"It's very possible that there could be this flood of goods coming into Europe in a way that causes real economic problems for Europeans," Kilcrease said. "It may cause another drag on the competitiveness of European firms who are making those same sorts of goods."